Liquidation Trading Strategy
The Liquidation Strategy is for scalp traders only.
For the journeyman of scalp trading, this is a bespoke technique that was created in-house with an extremely high win rate.
Although it's not essential, combining Tradingview and Exo Charts for this strategy will give you a greater edge.
Exo Charts will give you the benefit of seeing where liquidations take place, providing you with an opportunity to execute on a trade.
Liquidation Trading Strategy
The Liquidation Strategy is for scalp traders only.
For the journeyman of scalp trading, this is a bespoke technique that was created in-house with an extremely high win rate.
Although it's not essential, combining Tradingview and Exo Charts for this strategy will give you a greater edge.
Exo Charts will give you the benefit of seeing where liquidations take place, providing you with an opportunity to execute on a trade.
To apply this strategy you will also need to familiarise yourself with the liquidation calculator on ByBit.
The key to this strategy is in the name... Liquidity aka volume.
If you are still unfamiliar with analysing volume it is recommended that you study the Footprint charts module.
Key Points of the Lesson
UTILITY
Powerful scalping strategy.
Clear targets, quick exits, and even better entries.
Strong in high volume, volatile environments.
IMPLEMENTATION
Watch for an area of consolidation at a pivotal level:
Consolidation below resistance.
Consolidation above support.
Watch the volume on Exocharts/Atas:
High volume environment preferred.
Trade the “liquidation wick” for a quick reversal.
STEPS TO FOLLOW
Find consolidation under resistance or above support.
High volume around consolidation low/high ⇒ use Bybit calculator to determine the liquidation price.
Look for a quick leverage “flush” before a snapback reversal.
Confirm liquidation “bubbles” using Exochart.
PRACTICAL EXAMPLE
ENTERING TRADE / TAKE PROFIT
pre-set limit orders slightly below the liquidation price to account for slippage (0.2%-0.5%)
Market order as soon as price begins to turn around.
The invalidation is always below the liquidation wick ⇒ used on the 1 minute time frame.
Take profit 1 relatively soon, then move stop loss to entry ⇒ remaining position can continue, as often liquidations offer reversal points.
Target is subjective ⇒ depends on context, be conservative and fast.
Footprint software adds confidence.
TAKE HOME MESSAGE
Strategy based on liquidation wicks.
Trades must be taken quickly.
Entry and invalidation are simple.